The holders of common stock are entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors. We have never declared or paid dividends on our common stock.

Our 2005 Incentive Plan, as amended, provides for the granting of incentive stock options, non-statutory stock options, restricted stock units ("RSUs"), market-performance based restricted stock units ("MSUs"), stock appreciation rights, performance units and performance shares to employees, non-employee directors and consultants. Shares granted on or after May 16, 2013 as an award of restricted stock, restricted stock unit, market-performance based restricted stock units, performance share or performance unit ("full value awards") are counted against the authorized share reserve as one and nine-tenths (19/10) shares for every one (1) share subject to the award, and any shares canceled that were counted as one and nine-tenths against the plan reserve will be returned at the same ratio.

As of December 31, 2019, the 2005 Incentive Plan (as amended) has a total reserve of 27,783,379 shares for issuance of which 5,450,162 shares are available for issuance. We issue new shares from our pool of authorized but unissued shares to satisfy the exercise and vesting obligations of our stock-based compensation plans.

Stock-based compensation is based on the estimated fair value of awards, net of estimated forfeitures, and recognized over the requisite service period. Estimated forfeitures are based on historical experience at the time of grant and may be revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The stock-based compensation related to all of our stock-based awards and employee stock purchase plan for the year ended December 31, 2019, 2018 and 2017 is as follows (in thousands):



	For the Year Ended December 31,
	2019		2018		2017
Cost of net revenues	$	5,154	$	3,695	$	3,330
Selling, general and administrative	69,817		56,422		46,550
Research and development	13,213		10,646		8,974
Total stock-based compensation	$	88,184	$	70,763	$	58,854

We have not granted options since 2011 and all outstanding options were fully vested and associated stock-based compensation expense was recognized as of December 31, 2015. During the year ended December 31, 2019, 8,187 stock options were exercised at a weighted average exercise price of $8.07 per share. As of December 31, 2019, there were no options outstanding and exercisable.

The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between our closing stock price on the last trading day in 2019 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of 2019. This amount will fluctuate based on the fair market value of our stock. The total intrinsic value of stock options exercised for the year ended December 31, 2019, 2018 and 2017 was $2.0 million, $17.6 million and $18.1 million respectively.



	Number of Shares Underlying RSUs (in thousands)		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2018	931		$	129.42
Granted	292		255.42
Vested and released	(443	)	105.83
Forfeited	(84	)	184.04
Unvested as of December 31, 2019	696		$	190.60	1.1	$	194,114

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (calculated by multiplying our closing stock price on the last trading day of 2019 by the number of unvested RSUs) that would have been received by the unit holders had all RSUs been vested and released as of the last trading day of 2019. This amount will fluctuate based on the fair market value of our stock. During 2019, of the 442,524 shares vested and released, 141,543 shares vested were withheld for employee statutory tax obligations, resulting in a net issuance of 300,981 shares.

The total intrinsic value of RSUs vested and released during 2019, 2018 and 2017 was $112.4 million, $146.7 million and $99.5 million, respectively. The total fair value of RSUs vested during the year ended December 31, 2019, 2018 and 2017 was $46.8 million, $42.2 million and $46.2 million, respectively. The weighted average grant date fair value of RSUs granted during 2019, 2018 and 2017 was $255.42, $262.58 and $118.77 respectively. As of December 31, 2019, there was $88.7 million of total unamortized compensation costs, net of estimated forfeitures, related to RSUs and these costs are expected to be recognized over a weighted average period of 2.0 years.

We grant MSUs to our executive officers. Each MSU represents the right to one share of Align’s common stock. The actual number of MSUs which will be eligible to vest will be based on the performance of Align’s stock price relative to the performance of a stock market index over the vesting period, and certain MSU grants are also based on Align's stock price at the end of the performance period. Generally, the vesting period of MSUs is three years. For MSUs granted during the year ended December 31, 2019, the maximum number of MSUs which will be eligible to vest are 250% of the MSUs initially granted.



	Number of Shares Underlying MSUs (in thousands)		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2018	324		$	215.07
Granted	138		240.73
Vested and released	(191	)	77.17
Forfeited	(27	)	271.96
Unvested as of December 31, 2019	244		$	331.35	1.1	$	68,055

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (calculated by multiplying our closing stock price on the last trading day of 2019 by the number of unvested MSUs) that would have been received by the unit holders had all MSUs been vested and released as of the last trading day of 2019. This amount will fluctuate based on the fair market value of our stock. During 2019, of the 191,176 shares vested and released, 88,292 shares were withheld for tax payments, resulting in a net issuance of 102,884 shares.

The total intrinsic value of MSUs vested and released during 2019, 2018 and 2017 was $47.7 million, $92.7 million and $28.8 million, respectively. The total fair value of MSUs vested during the year ended December 31, 2019, 2018 and 2017 was $14.8 million, $19.5 million and $15.0 million, respectively. As of December 31, 2019, we expect to recognize $36.2 million of total unamortized compensation cost, net of estimated forfeitures, related to MSUs over a weighted average period of 1.1 years.

The fair value of MSUs is estimated at the grant date using a Monte Carlo simulation that includes factors for market conditions. The following weighted-average assumptions used in the Monte Carlo simulation were as follows:



	Year Ended December 31,
	2019			2018			2017
Expected term (in years)	3.0			3.0			3.0
Expected volatility	37.3		%	31.9		%	28.9		%
Risk-free interest rate	2.5		%	2.5		%	1.5		%
Expected dividends	—			—			—
Weighted average fair value per share at grant date	$	392.03		$	470.75		$	120.39

Total payments to tax authorities for payroll taxes related to RSUs, including MSUs, that vested during the period were $57.7 million, $86.1 million and $46.2 million during the year ended December 31, 2019, 2018 and 2017, respectively, and are reflected as a financing activity in the Consolidated Statement of Cash Flows.

In May 2010, our stockholders approved the 2010 Employee Stock Purchase Plan (the “2010 Purchase Plan”), which consists of consecutive overlapping twenty-four month offering periods with four six-month purchase periods in each offering period. Employees purchase shares at 85% of the lower of the fair market value of the common stock at either the beginning of the offering period or the end of the purchase period. The 2010 Purchase Plan will continue until terminated by either the Board of Directors or its administrator. The maximum number of shares available for purchase under the 2010 Purchase Plan is 2.4 million shares. In June 2019, the 2010 Purchase Plan was amended to include a non-Code Section 423 component to grant purchase rights to employees outside the U.S. and Canada with six-month offering periods and purchase periods.

The fair value of the option component of the 2010 Purchase Plan shares was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:



	Year Ended December 31,
	2019			2018			2017
Expected term (in years)	1.4			1.3			1.2
Expected volatility	50.0		%	35.2		%	26.8		%
Risk-free interest rate	2.2		%	2.2		%	1.0		%
Expected dividends	—			—			—
Weighted average fair value at grant date	$	86.02		$	94.71		$	31.36

We recognized stock-based compensation related to our employee stock purchase plan of $12.1 million, $5.6 million and $5.4 million for the year ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, there was $9.9 million of total unamortized compensation costs related to future employee stock purchases which we expect to be recognized over a weighted average period of 0.9 year.